The highly anticipated Trump-Xi meeting in South Korea bore major fruit for the U.S. clean energy sector, with President Donald Trump claiming that both nations have signed a one-year agreement that will ensure uninterrupted rare earth and critical mineral supplies from China. The pact should come as a lifeline for American clean energy manufacturers reeling from months of raw material shortages and price spikes.

This deal, a major sign of de-escalation in the long-running trade war between the globe’s two largest economies, boosts the outlook for clean energy Exchange-Traded Funds (ETFs). By assuring supply-chain stability, this agreement should remove a major operational headache and reduce input price volatility for component manufacturers, thereby improving profit visibility across the renewables sector.

America’s Reliance on Chinese Minerals

The global clean energy industry is acutely dependent on rare earth elements (REEs), a group of 17 minerals essential for high-performance magnets used in wind turbines, electric motors, and solar tracking systems. Across the globe, China enjoys a near monopoly on extracting REEs as well as on refining them, with the nation accounting for around 60% of global mining output and representing about 91% of global production, as of 2024 (as per a recent report released by the International Energy Agency).

Therefore, like many other nations, the United States also relies heavily on China for its import of REEs. Evidently, China accounted for 70% of U.S. rare earth imports between 2020 and 2023 (as per Statista).

This heavy dependence has recently caused distress for the U.S. clean energy industry, after China announced at the beginning of this month that it is increasing export controls on five rare-earth metals, in addition to the seven for which such controls were implemented in April this year.

Notably, amid the ongoing trade tensions between the U.S. and China, Beijing’s geopolitical leverage as a rare earth elements (REE) supplier has created significant uncertainty, contributing to the U.S. clean energy sector lagging behind its global peers.

On top of that, unfavorable government policies like accelerated phase-out of federal tax incentives for new projects and regulatory hurdles have already created an uncertain environment for the long-term growth prospects of the U.S. clean energy companies.

What’s the Current Scenario?

U.S. President Trump enthusiastically mentioned his latest meeting with his Chinese counterpart as “amazing” and claimed the issue of rare earth mineral import from China to be “settled”. However, it is important to note that while China has agreed to delay the implementation of its latest round of rare earth export controls as part of the recent deal, its earlier restrictions on these critical minerals appear to remain in place.

To this end, China’s Ministry of Commerce announced that the nation would pause for one year export controls introduced on Oct. 9 (as cited in a report of Investing.com).

However, neither Chinese nor U.S. officials have mentioned the export restrictions introduced in April on seven rare earths. So, the general market consensus is that the earlier restrictions will remain in place.

Therefore, while the long-term prospects of the U.S. clean energy industry remain somewhat clouded by uncertainty surrounding earlier restrictions and the potential for new developments that could again complicate U.S.-China trade relations, the one-year rare earth agreement should restore confidence in the industry’s near-term growth opportunities.

Clean Energy ETFs to Gain

Following the new trade agreement, clean energy ETFs may see renewed inflows as investors bet on a more resilient U.S. supply chain and improved sector profit margins. For those seeking to capture this upswing, we have mentioned below four clean energy ETFs that offer heavy exposure to U.S. clean energy stocks and can be kept in one’s watchlist:

iShares Global Clean Energy ETF ((ICLN Quick QuoteICLN - Free Report) )

As the largest clean energy ETF, ICLN offers exposure to 102 companies from solar, wind, and other renewable sectors worldwide. It holds net assets worth $1.94 billion. The United States accounts for 24.61% of this fund’s holdings.

ICLN has surged 53.8% year to date. The fund charges 39 basis points (bps) as fees. Its volume is good at an average of 3.57 million shares a day.

First Trust Nasdaq Clean Edge Green Energy ETF ((QCLN Quick QuoteQCLN - Free Report) )

It offers exposure to 50 U.S.-listed companies involved in renewable electricity generation, energy storage, electric vehicles, and those involved in emerging clean energy technologies. It holds net assets worth $560.9 million.

QCLN has surged 37.8% year to date. The fund charges 56 bps as fees. Its volume is good at an average of 147,297 shares a day.

ALPS Clean Energy ETF ((ACES Quick QuoteACES - Free Report) )

This fund offers exposure to companies primarily located in North America that are focused on renewable energy and other clean technology themes. It holds net assets worth $115.9 million. The United States accounts for 86.31% of this fund’s holdings.

ACES has soared 36.1% year to date. The fund charges 55 bps as fees. Its volume is good at an average of 33,061 shares a day.

Invesco WilderHill Clean Energy ETF ((PBW Quick QuotePBW - Free Report) )

This fund offers exposure to a diversified portfolio of 65 renewable energy stocks. Its net asset value was $33.17 per share as of Oct. 29, 2025. The United States accounts for 71.04% of this fund’s holdings.

PBW has soared 66.5% year to date. The fund charges 64 bps as fees. Its volume is heavy at an average of 1.38 million shares a day.